In a previous post, the Rules of Thumb blog from MoneyThumb discussed helping your accounting clients handle debt. Today we are going to approach the other end of the spectrum, and that is helping them handle wealth. Whether your client is already wealthy and need financial guidance, or they have experienced a windfall like a big inheritance or winning the lottery, you can add so much value to your firm by offering wealth management services.
The question that arises, however, is how should you structure your accounting firm to handle the delivery of services that go along with wealth management? There are several models that can be followed, each with advantages and disadvantages. We have listed these models below:
1) Your accounting firm can add an internal wealth management system for your current clients and use this system to attract new clients who need wealth management. This new system could also introduce a new wealth management client to the tax side of your accounting practice, even if they did not originally opt for these services. This method is easiest for large accounting firms who have the capital to build and maintain this new business system.
2) Many larger brokerage firms will offer a revenue sharing agreement with an accounting firm. This will require your accountants and CPAs in your firm to get a license. Once this license is obtained, the brokerage firm can recommend clients to you and share in the revenues generated. This model for creating wealth management in your firm allows you to simply concentrate on your regular tax and accounting duties while outsourcing the wealth management component and still being compensated. By choosing this way of creating wealth management services within your accounting firm, you will not have to lay out any capital other than the materials needed to study for the exam and maybe a class and receive compensation for the business generated by your clients.
If your accounting firm has yet to include wealth management services in your practice, as you can see there are several ways to go about making it happen. By adding this service to your firm’s offerings, you create a new revenue stream and keep your client closer to your firm, which is always a good thing.